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His father was an engineer for Siemens AG, and the family moved several times because of his father's work; they lived in Berlin, Upper Bavaria, Nuremberg, Mannheim, and Stuttgart. Reiser was never really able to feel at home in any of these places. Many of his friends said, when they were asked in an interview which was broadcast on the TV channel arte in 1998, that he started playing music to create a place where he felt at home.

Reiser was known by his friends as someone who had a very special mind of his own. For example he managed to persuade his mother Erika Möbius that he was allowed to stop attending school and start an apprenticeship in a studio for photography, which he then quit in order to join a music conservatory and later to follow his two older brothers to Berlin at the early age of 17 in order to put the world's first "Rock Opera" onto stage. His mother supported his musical and artistic ambitions since she had soon realized that he was an autodidact; he never learned things when he was taught by someone else. Thus he taught himself how to play cello, guitar, the piano and other instruments, wrote lyrics and poetry and later also assumed jobs as actor in some movies and TV shows or at the theatre.

He was awarded his nickname Rio as teenager from an eccentric artist friend of the family who invented the name "Rio de Galaxis" for him in an "intergalactic youth ordination". He kept the nickname and later decided to completely change his name from Ralph Möbius to Rio Reiser because he played a leading role in the movie "Johnny West" and needed a catchy artist name. He took the idea for the name Reiser from his older brother Gert who had occasionally used it as artist name before. The name makes reference to the main character of the autobiographical novel Anton Reiser (de) by Karl Philipp Moritz.

As an adult, Rio soon discovered his musical talents which opened a way for him to express himself, thus enabling him to overcome restraints he otherwise felt due to a certain, intrinsic insecurity or shyness towards other people. The ability to reach out to others—even to the unknown masses in a concert audience—through his musical performance was later often referred to as being the core of his special talent to touch his listeners, or even to "build a relationship" with each of them for the period of a concert.

During his teenage years, Rio Reiser first discovered—and immediately became a big fan of—The Beatles at age 13 who represented the sound—and way of life—of the future for him and also inspired him to learn to play guitar, to compose his own songs and to form his first band. Later he preferred the rough, direct sound of The Rolling Stones. In reference to John Lennon and Paul McCartney, who were usually credited as "Lennon/McCartney" with respect of the songs they wrote, Rio and his band colleague and best friend R.P.S. Lanrue (real name Ralph Peter Steitz) as composers of most of the Ton Steine Scherben-songs were often credited as "Möbius/Steitz". Besides contemporary rock bands which became the soundtrack of the social changes beginning in the Sixties, Rio Reiser was also influenced by other music styles including orchestral film soundtracks, German "folk songs" and traditional music and German singers such as Marlene Dietrich.

Reiser was unique among German rock stars of his time in being openlygay, although he didn't come out publicly until the 1980s.[1] At the beginning of his career, Reiser sometimes felt misfit among the political groups and various movements which, in the early Seventies, did not strongly approve of homosexuality, but later gained more confidence while working with artists who were engaged in the newly forming gay movement of Berlin, including the gay performance group "Brühwarm" which recorded two LPs with music composed by Ton Steine Scherben.

While he still went to school, Reiser became singer in his first rock bandThe Beat Kings. The band had been founded by R.P.S. Lanrue (real name Ralph Peter Steitz), a boy living in the neighbourhood, who had heard of Reiser's singing talents and had asked him to join the band after letting Reiser perform a few songs to give a sample (as R.P.S. Lanrue later claimed in an interview, the Rolling Stones song "Play with fire" tipped the balance). Lanrue, who was of the same age as Reiser, soon became Reiser's closest friend and musical counterpart who went on to support Reiser as musician and lived with him most of the time until his death.

After having quit school, Reiser left his then hometown, as well as The Beat Kings, to follow his two older brothers' call to Berlin in order to compose the music for their common project, the first Beat-Opera, which turned out to be, in the words of Rio, an "absolute flop". Nevertheless Reiser stayed in Berlin where he was later joined by Lanrue.

After occasionally having toured the countryside with the theatre group "Hoffmans Comic Theater" (consisting in Reiser, his brothers and a group of friends), Reiser went on to continue theatrical projects in Berlin where he joined an improvisation theatre group which played scenes from the everyday life of pupils and trainees, thus adopting and reflecting the social problems among young people in West Berlin in the Sixties, as well as its tense and sense of imminent social change. The theatre was very successful with young people and toured through Germany until 1969. The involvement in the context of the student and youth movement—not only as musician and actor, but often in the political debates which were to follow the theatre performance as well, played an important role for Rio Reiser's development of political awareness and for his lifelong commitment—both privately and as musician—to liberation movements of various kinds, including, in particular, the left-wing political movement characteristic for the Sixties and Seventies (while he liked to put an emphasis on supporting the workers' and "simple people's" interests rather than the students' intellectual approach), the Gay liberation movement and later, the German ecological movement. His musical work to a large extent reflects these political influences and convictions and thus can hardly be detached from his political positions.

In 1970, Reiser recorded his first single with the band Ton Steine Scherben. The band name was chosen in a lengthy democratic decision procedure among the members, friends and supporters of the band. The original name idea was actually "VEB Ton Steine Scherben", but the "VEB" was soon dropped. The band name can be translated both as "clay stones shards" and as "sound stones shards", thus offering different approaches to interpretation (sometimes also understood as a political program) and, last not least, making reference to Reiser's favorites The Rolling Stones. In that same year the group performed their first public concert and recorded their first full-length record.

The band soon became very popular with the squatter scene, left-wing student and workers' movement and was invited to numerous political events to provide the soundtrack to demonstrations, parties and rallies across Germany which often inspired the audience to translate the message into action afterwards. Thus, many buildings were seized after the end of a concert, and the band often ended up sitting in some commune discussing the political agenda with their hosts. Reiser later revealed in his autobiography that he sometimes would have preferred to just get away with some nice person.

This farmhouse in Fresenhagen became Reiser's residence in 1975.

Fifteen years of touring, four more LPs and various film projects and collaborations with other musicians followed, including the recording of two children's records. Reiser lived together with the band and a large group of friends and supporters most of that time, first sharing a commune in Berlin. In 1975—after the band was tiring of the numerous demands and expectations by all kinds of political groups—the group settled down on a farm in Fresenhagen in North Germany which continued to be Reiser's refuge and place of inspiration even after moving back to Berlin a couple of years later.[2] One of the band's most important and ambitious albums, the "Black Album", was recorded there.

Ton Steine Scherben were musically very successful and, being one of the first rock bands in Germany which actually wrote and performed German rock songs, opened the door for countless successful German rock and pop bands to follow. Due to their refusal to adapt to the demands of the main stream music business, as well as to financial mismanagement, a certain "outlawish" image in the eyes of the large radio and TV stations and a fan community which often forgot that the band had to make a living out of the music and would have despised any commercial ambitions, they were not able to translate their musical success and widespread popularity into financial stability.

In 1985, Reiser and the band finally split, partly due to a feeling that it was time to move on, but to a large extent because of a desastrous financial situation. Reiser had a large debt with the group, but his early solo career went so well that he was free from debt in a short time. His first solo record-album was called "Rio I" and included the popular song König von Deutschland ("King of Germany"). The album was produced by Anette Humpe, a renowned German music producer who had already produced Reiser's very first solo single, "Dr. Sommer", some time ago when he was in need of cash and had asked her for support. The song "König von Deutschland" became one of the few real hits of Reiser, has been covered and cited by many artists ever since and is still known among most people in Germany. Other hit singles of the first album included the love song "Für immer und dich" and the melancholic "Junimond". Reiser could not repeat the commercial success of the first album, nevertheless he released five further studio albums until his death, most of them highly praised by the critics.

Many of his fans from the Ton Steine Scherben-days thought that he was selling out to mainstream, capitalist music business, and blamed him for becoming—at least for a period of time—a commercially successful musician. However, when listening closely to the lyrics, it can be noted that Reiser never abandoned his personal approach to music, politics, life and love, although the message was delivered in a more subtle way now. Reiser sometimes admitted that the objections to his solo music, even hatred by some old-time fans was a serious problem for him. Wandering on the edge of commercial adaptability, while trying to conform with the expectations of old friends, fans and political movements which he supported meant a difficult struggle for Reiser which sometimes drove him to despair and depression. At the same time, he continued to be a very creative, productive musician and song-writer who collaborated with other musicians and friends and underwent strenuous concert tours which often brought him close to physical exhaustion. One of the highlights of his career were two concerts performed in East Berlin in 1988 where he faced a sold out concert hall filled with young people on the verge of the revolution which one year later led to the collapse of the political system of the German Democratic Republic and the opening of the Berlin wall. Recordings of the concerts prove that the east German audience knew the lyrics of his solo songs, and in particular all of the "Ton Steine Scherben" songs which he performed by heart, even though the albums were hard to come by in the GDR.

Reiser wrote and performed most of his songs entirely by himself, although he was often accompanied by his long time friend R.P.S. Lanrue who continued to support him as lead guitar player and also delivered many musical ideas, while a few of his song lyrics were also written by or together with his long-term partner Misha Schoeneberg. Reiser's sixth and last solo album, which was recorded in 1995, was called Himmel und Hölle (Heaven and Hell). The album was the last one which he was contractually obliged to deliver to his major music company, and both the musical approach as well as the lyrics imply that Reiser was about to return to a state of inner independence from the major business not only personally, but also in artistic terms, including a sound and concept which is often seen as more authentic than the previous studio albums. After the release of the last album, which was not strongly marketed by his company, even though praised by the critics, Reiser was preparing new songs which he would have produced independently again, the completion of which was interrupted by his sudden and unexpected death.

Some critics say that Rio Reiser created a new image of a German folk singer; he was even called a "Schlager" artist, and a "Volksmusik" musician (sometimes translated as "folk music", but in a literary sense it means music of the people). To other critics, Rio Reiser was simply a singer in a rock band. However, Reiser sometimes approved of being referred to a Volksmusik musician, because he thought that this would simply mean he sang music for the people.